The finance chief of HS2 has quit his post following a critical report by the public spending watchdog into staff redundancy payments related to the team's move to Birmingham.

Steve Allen, chief financial officer at HS2 Ltd, said he was stepping down from his role after the National Audit Office (NAO) revealed in July that the Government-owned company had agreed £1.76 million in unauthorised redundancy payments.

The NAO found HS2 ignored orders from the Department for Transport that its redundancy scheme should be restricted to statutory levels.

Mr Allen will leave his post at the end of the financial year.

The first phase of the new high-speed rail line will run between Birmingham and London and is due to open in 2026.

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Redundancy compensation worth one month's salary for every year's service was agreed with outgoing staff to coincide with HS2 moving its headquarters from London to Birmingham.

The statutory standard is around one week's pay per year depending on age and length of employment.

Some staff were even offered paid leave to top up their exit packages above the limit of £95,000 imposed as part of the civil service compensation scheme.

HS2's chief executive Mark Thurston claimed Mr Allen had been "absolutely critical" in identifying ways to rectify "a number of issues that needed to be addressed", including administration of redundancies.

He described his resignation as an "honourable decision", adding: "I respect Steve's decision that now is the right time for him to move on."

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Mr Allen, who joined HS2 from Transport for London in October 2015, said the executive and board were "misinformed about the status of critical approvals for redundancies".

He added: "Those assurances were given by teams for which I was responsible and, obviously, I regret that.

"So, while we are now putting in place the measures to strengthen financial governance systems and to provide robust financial stewardship for the company, I believe it will be appropriate for me to move on."

Phase one of the £55.7 billion high-speed railway is due to open in late 2026 and will run from central London to a new terminus in Curzon Street in Birmingham's Eastside district.

The second phase will run to Cheshire and the North West and also to Yorkshire via the East Midlands.